Treasury yield is going to be higher after QE2 ends and the Fed starts to sell. The Fed's current plan is to start selling 7/1/2012 at a rate of 300 billion a year for a little bit more than 4 years.
El-Erian thinks current growth rate hasn't reached escape velocity. A higher interest may cause US economy to contract again and people calling for QE3. Will there be a permanent monetization of debt? The biggest losers will be countries holding large dollar reserve, such as China, Japan, UK, Brazil, and Taiwan, because the purchasing power of the US dollar will be diluted.
US Public Debt
The Fed will probably consider the growth rate and escape velocity before selling. If growth rate is still slow by 2012, the selling may be done at a slower pace. That will have the same effect - a permanent monetization of debt.